Does the media help or hurt retail investors during the IPO quiet period?

Brian Bushee, Matthew Cedergren and Jeremy Michels

Journal of Accounting and Economics, 2020, vol. 69, issue 1

Abstract: We examine how the media influences retail trade and market returns during the “quiet period” that follows a firm's IPO. We find that more media coverage during this period is associated with more purchases by retail investors and that such purchases are attention-driven, rather than information-based. Further, these retail trades are negatively associated with stock returns at the firm's first earnings announcement post-IPO. Our results suggest that media coverage, combined with market frictions that limit price efficiency in the post-IPO period, leads to worse investing outcomes for retail investors.

Keywords: Media; Retail investors; Initial public offering; Quiet period; Individual investors; Investor attention (search for similar items in EconPapers)
JEL-codes: G11 G14 G24 M48 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:69:y:2020:i:1:s0165410119300564

DOI: 10.1016/j.jacceco.2019.101261

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